Farm Credit System Reform Act of 1996
Public Law 104-105 · H.R. 2029 · 104th Congress · began in the House
Signed by Bill Clinton (D) on Feb 10, 1996 · Agriculture and Food
Sponsor: Rep. Wayne Allard (R-CO-4)
Cosponsors (31): Rep. Tim Johnson, Rep. Nick Rahall,
Passage votes
- HouseUnanimous consent
- SenateVoice vote
Data notes
The final version of the law, as each chamber passed it. A chamber that passed it by voice vote or unanimous consent has no count. “Method not stated” means the record does not say how the chamber voted. Where the record has a member-by-member vote, the “Who voted for it” section shows who voted yea.
Summary
The Congressional Research Service’s plain-language summary of what the law does.
TABLE OF CONTENTS:
Title I: Agricultural Mortgage Secondary Market
Title II: Regulatory Relief
Title III: Implementation and Effective Date
Farm Credit System Reform Act of 1996 - Title I: Agricultural Mortgage Secondary Market - Amends the Farm Credit Act of 1971 to modify the definitions of "agricultural real estate" and "certified facility."
(Sec. 103) Modifies the duties of the Federal Agricultural Mortgage Corporation (FAMC) to include purchasing loans and issuing related securities guaranteed for the repayment of principal and interest.
(Sec. 104) Modifies FAMC's powers to include performing the functions of an agricultural mortgage marketing facility operating as a certified facility.
(Sec. 105) Requires (current law allows) Federal reserve banks to act as depositaries, fiscal agents, or custodians of FAMC. Requires that FAMC have access to (current law allows the Secretary of the Treasury to authorize FAMC to use) the book-entry system of the Federal Reserve System.
(Sec. 106) Makes marketing standards inapplicable to FAMC. Allows FAMC to establish a marketing facility as an affiliate.
(Sec. 107) Authorizes FAMC to issue a security that represents an interest in, or an obligation backed by, a pool of qualified loans meeting certain requirements. Removes provisions prohibiting loans with recourse to the originator. Modifies restrictions on FAMC's authorization to issue debt obligations.
(Sec. 108) Removes or repeals provisions: (1) setting forth reserve or subordinated participation requirements; and (2) relating to loan pool composition standards.
(Sec. 110) Requires the FAMC Board to promote and encourage the inclusion of qualified loans for small farms and family farmers in the agricultural mortgage secondary market.
(Sec. 111) Modifies the definition of "affiliate."
(Sec. 112) Makes provisions in State laws or constitutions inapplicable to loans under agricultural mortgage secondary market provisions of the Act if the State provisions limit interest rates, prepayment penalties, or similar matters.
(Sec. 113) Modifies requirements regarding risk-based capital, minimum capital, critical capital, and enforcement levels.
(Sec. 117) Requires FAMC to increase its core capital.
(Sec. 118) Provides for the voluntary and involuntary liquidation of FAMC.
Title II: Regulatory Relief - Removes from the general powers of Farm Credit Banks that of approving the appointment and compensation of the chief executive officer of associations in their districts.
(Sec. 202) Allows loans with private mortgage insurance to exceed 85 percent of the appraised value.
(Sec. 203) Removes provisions mandating that each Farm Credit Bank require a financial statement from each borrower at least every three years.
(Sec. 204) Modifies eligibility requirements regarding: (1) associations of farmers, producers or harvesters of aquatic products, or any federation of such associations that is operated on a cooperative basis; and (2) other specified entities.
(Sec. 206) Provides for the treatment by bank or association by-laws of voting stock or participation certificates regarding sale into a secondary market.
(Sec. 207) Mandates disclosure of an increase or decrease in a loan interest rate.
(Sec. 208) Amends provisions relating to the restructuring of distressed loans to exclude from the definition of "loan" a loan designated, at the time the loan is made, for sale into a secondary market.
(Sec. 209) Permits Federal Credit System (FCS) associations to establish administrative service entities.
(Sec. 210) Ends the power of the Farm Credit Administration (FCA) to approve management agreements that have been agreed to by a majority vote of the voting stockholders or contributors to the guaranty fund of each of the institutions involved.
(Sec. 211) Prohibits FCA requirements governing quarterly reports to stockholders from being more burdensome or costly than the requirements applicable to national banks.
(Sec. 213) Extends the length of time between required FCA examinations of FCS institutions.
(Sec. 214) Removes provisions defining "receiver" as a receiver or conservator appointed by the Farm Credit System Insurance Corporation (FCSIC). States that the FCSIC may act as conservator or receiver of an FCS institution.
(Sec. 215) Provides for adjustments to the premiums due from insured FCS banks. Establishes in the Farm Credit Insurance Fund (FCIF) an Allocated Insurance Reserves Account (AIRA) for each insured FCS bank and for all holders of Financial Assistance Corporation stock. Directs the FCSIC to allocate FCIF amounts exceeding the average secure base amount to the AIRAs.
(Sec. 216) Grants the corporation the authority, on cancellation of an FCS institution's charter, to examine the institution in receivership. Requires that an examination be performed at intervals as the corporation determines.
(Sec. 217) Requires FCSIC to implement the least-cost alternative, including liquidation, in providing assistance to troubled FCS banks.
(Sec. 218) Requires the FCA to consult with the corporation regarding: (1) issuance of insured obligations by an undercapitalized FCS bank; and (2) a proposed merger or restructuring involving an undercapitalized institution. Sets forth specified FCSIC oversight and regulatory authority, including regulation of golden parachute and indemnification payments.
(Sec. 220) Terminates the interest rate reduction program on a specified date.
(Sec. 221) Declares that any institution of the FCS or any director, officer, employee, or agent of an FCS institution that discloses to a Government authority information regarding a possible violation of law or regulation shall not be liable under U.S. or State law for the disclosure or for any failure to notify the person involved in the possible violation. Allows such disclosure.
Title III: Implementation and Effective Date - Provides for the implementation of this Act and its effective date.
Committees
The committees the bill was sent to, and what each did with it.
Agriculture Committee · House · markup by, referred to, reported bySubcommittee: Forestry, Resource Conservation and Research Subcommittee
Data notes
A committee links to its page only where it exists in the current Congress; older and renamed committees are named without a link.
Timeline
From introduction to signing, newest first: the committees, the floor and the president. 22 actions.
- Feb 10, 1996Became lawBecame law · Became Public Law No: 104-105.
- Became lawBecame law · Signed by President.
- Jan 31, 1996PresidentPresident · Presented to President.
- Jan 26, 1996Resolving differencesResolving differences · Senate agreed to the House amendment to the Senate amendment by Voice Vote.
- Jan 3, 1996Resolving differencesResolving differences · Motion to reconsider laid on the table Agreed to without objection.
- Resolving differencesResolving differences · On motion that the House agree with an amendment to the Senate amendments Agreed to without objection.
- Resolving differencesResolving differences · Mr. Emerson asked unanimous consent that the House agree with an amendment to the Senate amendments.
- Dec 22, 1995CommitteeCommittee · Discharged from Senate Agriculture, Nutrition, and Forestry Committee
- Dec 21, 1995FloorFloor · Passed Senate with an amendment and an amendment to the Title by Voice Vote.
- FloorFloor · Amendment SP 3109 agreed to in Senate by Voice Vote.
- Dec 20, 1995CommitteeCommittee · Referred to Senate Agriculture, Nutrition, and Forestry Committee
- Dec 19, 1995FloorFloor · Motion to reconsider laid on the table Agreed to without objection.
- FloorFloor · On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.
- FloorFloor · Mr. Allard moved to suspend the rules and pass the bill, as amended.
- Dec 18, 1995CommitteeCommittee · Reported by House Agriculture Committee
- Dec 13, 1995CommitteeCommittee · Markup by House Agriculture Committee
- Jul 27, 1995CommitteeCommittee · Reported by Forestry, Resource Conservation and Research Subcommittee of the House Agriculture Committee
- CommitteeCommittee · Markup by Forestry, Resource Conservation and Research Subcommittee of the House Agriculture Committee
- CommitteeCommittee · Hearings by Forestry, Resource Conservation and Research Subcommittee of the House Agriculture Committee
- Jul 20, 1995CommitteeCommittee · Referred to Forestry, Resource Conservation and Research Subcommittee of the House Agriculture Committee
- Jul 13, 1995CommitteeCommittee · Referred to House Agriculture Committee
- IntroducedIntroduced · Introduced in the House
Data notes
Shows the introduction, each committee and subcommittee step the source dates (referral, hearings, markup, report, discharge), and the floor, conference, presidential and became-law steps. Calendar placements, messages between the chambers, amendments and committee report numbers are not shown for laws before the 108th Congress. Two entries the source lists twice are shown once.
Official record
The bill’s full text and every action, including introduction and committee steps, are on Congress.gov. Data through Oct 7, 2026.